THE WAR AND ITS EFFECTS

Otago Daily Times, Issue 17039, 25 June 1917, Page 7

THE WAR AND ITS EFFECTS

ADDRESS BY DR BEDFORD. i A PLEA FOR ECONOMY. At tho opening of the session of the Otago University Debating Society on Friday evening a most interesting address was delivered by Dr H. D. Bedford on the subject- of tho war and its effects and the remedies for what, will follow when peace ie declared. Professor Thompson presided over a Rood attendance. Dr Bedford, at the outset, said that the war had occasioned the greatest disturbance of our industrial system ever experienced in recent centuries, the effects of which would not cease suddenly upon the declaration of peaco. A redistribution of the labour and capital energy of the world must take place, and thero was likely to be a period of dislocation which would epell hard times to many, chiefly tho poorer classes. Tho war. too. had eaten into the world s capital, and much industrial energy would bo needed for its replacement. It had been estimated bv one writer that the cost of rebuilding Belcium and Northern .Prance would bo as jrroat as tho total cost to tho Allies of tho firet two years of the war. Just now the world was turning all it could into food for soldiers and food for cannon, and lotting the future take care of itself. The result would bo that when the war was over tho world, and particularly tho belligerent nations, would have much less capital than they had at the beginning or tho war. This meant that there would not bo the samo moans of producing wealth as existed prior to the outbreak of war. New Zealand probably was less affected by war influence than any other part of the Jimpire, but even here the construction of public works had been almost suspended, and practically no new industrial enterprises were being started' to meet the conditions of tho futuro peace. Thus, even in this dominion, we had been compelled to discontinue a great part of our normal provision for the future. The settlement of returned soldiers upon tho land would be easier _ and the recovery from the exhaustion of war more speedy if, while the war was on we could have carried forward our railway and road construction into tho back-blocks. But this conntry would have to begin the work of rehabilitation on the declaration of peace without the aid of this capital, because, after providing for the current wants of the war, there was no labour to spare for the making of capital instruments of future production. Hence the war was not only devouring the wealth that our Empiro_ is producing now, but was also weakening its power,to produce wealth when peace returns. Now the world could not be made poorer in this way without a number of people finding it increasingly difficult to make a living. When peace was restored the British Empire in all its ports, and indeed, all the nations at war, i would find themselves with an unprecedented number of pensionaries. These pensionaries would be of two kinds; first, wounded soldiers and the dependents of soldiers killed; and, secondly, subscribers to the war loans. The industry of the Empire would be taxed at tho conclusion of war to provide both classes with a reward. The payments to the money-givers would be infinitely greater than the payment to the blood and life givers. Both together would represent an enormous burden upon the wealth produced for mariy years after the conclusion of peace. Already the annual interest bill on the British war loan was over £200,000,000. New Zealand's war interest bill would not be so great in proportion to population, but it would be heavy. What a terrific burden upon future industry! The British Empire as a whole would bo poorer.by the war interest bill it had to pay to foreign money-lenders like the Americans. This bill would represent bo much lees wealth to feed, clothe, and shelter its people. That part of the people of tho Empire which had not subscribed to the war loans would have its poverty further intensified by any taxes it had to pay to meet the interest due on war loans. So great would be the subtraction from tho earnings of the labouring class if it had to pay the interest on the war loans subscribed by the money-lending class—so great indeed would bo the difficulty of getting a living—that there could be little doubt that the Government of tho Empire would in large measure havo to tax the moneylending class to get the means to pay the interest due to that class. It the poorer classes were going to be saved from inconceivably hard times, the money-lending classes would have to tax themselves largely to pay their own interest. The abnormal shortage of capital with which the work of industrial reconstruction would commence on the restoration of peace would tend to maintain a high rate of interest. Dear money meant embarrassment to industry, and it meant low wages—not necessarily low money wages, but wages of low purchasing power. What with taxes to pay interest on war loans, taxes for soldiers pensions, a high rate of interest to obtain the necessary assistance of capital, labour was going to find the cost of living very burdensome for many years after the war. Were there any ways of preparing to meet these expected hard times, and mitigating their severity? Fortunately thero were, and this country should be addressing itself to them at once. Thero was no way of easing the burden of military pensions, but enlightened conduct now would help us to ease the other two burdens. More of the wealth that was needed for this war should be directly conscripted, as men are conscripted. More should be taken, by taxation, and less by loan, with promise of repayment at an oppressive rate of interest. It was regrettable that the demands upon current wealth were so much less exacting than the demands upon current life. The .remedy for the shortage of capital was rigorously to cut off luxuries. I here was a great multitude of men in this dominion who after satisfying the reasonable needs of life, had a surplus of wealth J. here were only two ways in which this surplus could be employed patriotically. One was m devoting it to war purposes; the other was in devoting it as capital to the assistance of industry. If after meeting the needs of war there wa3 a surplus of wealth in this country, it should go into capital like reproductive public works. If instead of spending over £4,000,000 a year on alcohol, we spent it on railway and road construction, irrigation, plant for harnessing the water-power running to waste, plant for mine development, and so on, we would find it much easier to furnish employment to returned soldiers, we would lower the rate of # interest, lower the cost of livin/r and raise wages. There were four things to which o-ur wealth could be devoted-— (1) The necessaries of life, (2) the sinews of war, (3) capital to assist production in tho future (4) luxuries. Patriotism and consideration for the poor dictated that we should see that the.first three needs were satisfied before we . indulged the .fourth Unfortunately, each of the hrst three are short, especially the third Just as in war time, an abnormally large proportion OI the nation's industrial enerfy was devoted to tho production of (roods needed for immediate consumption, and an abnormally small proportion to tho production of capital goods, so, after the war, an abnormally small proportion of industrial energy would bo available for the production of consumption goods and an abnormally large proportion for tho production of capital goods to repair such terrible waste as that which had occurred in Belgium. The hard times in Europe would have many indirect effects on Now Zealand. Borrowing in London would bo difficult, and the consequent high rate of interest would bo an embarrassment to many industries. The labcmrinjr classes of this dominion should start a campaign against a high interest rate, and this meant a campaign against all forms of extravagance. T^"•> Spartfin RTiir : t was wnn+r>d now if tli o •burdens of tho poor'were to ho when the armies of Europe were disbanded. To encourage this spirit, all forms of extravagant expenditure should be burdened with exceptionally "heavy and rigorous tnxes. At tho conclusion of his address Dr Bedford was accorded a hearty vote of t.hants by acclamation, and tho mp"tinrr closed with tho singing of tho National Anthem.'